Putin says Rosneft buy of Bashneft gives impetus to privatization

Wed Oct 12, 2016 2:48pm EDT
 
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By Oksana Kobzeva and Darya Korsunskaya

MOSCOW (Reuters) - The Russian government's sale of a controlling stake in mid-sized oil firm Bashneft to the country's largest oil producer Rosneft should give momentum to Russia's privatization drive, President Vladimir Putin said on Wednesday.

The Economy Ministry said that the government had completed the sale of the Bashneft stake to Kremlin-owned Rosneft for 329.69 billion roubles ($5.30 billion).

Rosneft bought a 50.08 percent stake in Bashneft, Russia's fastest growing oil company with production of 400,000 barrels per day (bpd) and extensive refining assets, beating an offer from an unidentified second bidder.

The sale is a key step in a government privatization push meant to raise cash to plug budget holes amid low oil prices and Western sanctions imposed over Ukraine.

"The main thing is that we don’t stop the privatization process on this (Bashneft sale)," Putin said at an economic forum.

"This privatization is carefully crafted, keeping in mind the synergy effect for obtaining the maximal gain from the point of view of budget and fiscal interests," he said.

Putin said that now a 19.5 percent stake in Rosneft could be sold to private foreign investors.

The Bashneft deal has caused tensions, with the government postponing the sale in August to calm rivalry among powerful groups before September parliamentary elections.   Continued...

 
Russian President Vladimir Putin attends the annual VTB Capital "Russia Calling!" Investment Forum in Moscow, Russia, October 12, 2016. Sputnik/Kremlin/Alexei Druzhinin via REUTERS